JPMorgan Chase is getting into the car-buying business, gearing up to launch a digital offering that enables customers to shop for a car and get financing for their purchase using a computer or smartphone.
According to a report by The Wall Street Journal, the new service, dubbed Chase Auto Direct, will be powered by TrueCar, which is an online car-buying site. The idea behind the partnership is to speed up the car-buying process, and it is the latest example of a financial services company getting into bed with a financial technology firm.
In 2015, JPMorgan inked a partnership with OnDeck to develop an online small business loan portal for the bank’s customers. With the OnDeck partnership, the online lender’s name was featured on the product, but with this car-buying initiative, TrueCar will remain behind the scenes.
Auto finance customers will start at Chase.com, navigate to a TrueCar site and then end up back at Chase’s site to apply for the secure financing. With the service, customers will be able to find and look at financing options for new and used cars and get approved for their loan. They can compare prices that other consumers pay and see options among different dealerships that are part of the bank’s network. The service will be available to existing customers in 30 states in the U.S., with it being rolled out further in phases at the beginning of next year.
For sometime now, banks have been pondering what to do in the FinTech space, with some going it alone, while others are choosing to partner up. Recent findings by CapGemini in its annual World Banking report show that banks are moving toward the crossroads of the build-or-buy debate. And that could be good news for FinTech firms — or, rather, the folks who start them up and steer them into the arms of large-pocketed suitors. According to a survey of 16,000 retail banking customers, nearly two-thirds are tapping into FinTech offerings, and 55 percent are looking to recommend family and friends to these tech-savvy firms. Yet, only 38 percent would steer those same people to their banks.